P. S. Suryanarayana

SINGAPORE: Malaysia is placing “high priority” on signing a comprehensive economic pact with India before the end of this year.

Malaysia's International Trade and Industry Minister Mustapa Mohamed said in Singapore on Friday he was “directed” by his Prime Minister, Najib Tun Razak, to get the pact done in 2010 itself. A similar directive was issued by Prime Minister Manmohan Singh to Commerce and Industry Minister Anand Sharma. Mr. Mustapa said the two countries were right now “on track” for this target. If he and Mr. Sharma were to fail, though, “both our heads will roll,” said the Malaysian Minister in response to questions at a meeting with the Foreign Correspondents Association here.

The current exercise was aimed at concluding the negotiations by August, so that the comprehensive economic cooperation agreement could be signed during Dr. Singh's planned visit to Kuala Lumpur before the end of the year, Mr. Mustapa said. “This [pact] is important to us. We already have one with China. And, India is one of the very important trading partners for Malaysia.”

On Malaysia's plans to settle its trade with China in the Chinese currency, Mr. Mustapa said the U.S. dollar was still being used by many Malaysian traders.

Under Malaysia's New Economic Model now being blueprinted, merit would be emphasised to make the country's economy more competitive and resilient at home and abroad. However, “affirmative action is still our policy,” with the focus being shifted to help those belonging to “”the bottom 40-per-cent of the income bracket, irrespective of race,” said Mr. Mustapa.

The original affirmative policy, launched in 1971, was designed to favour the country's Malay-Muslim majority so as to redress its historical economic backwardness. Under the new policy now, affirmative action would apply to those in need among not only the Malays but also the minority groups of ethnic Chinese and the people of Indian origin.

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